MAJOR domestic fund manager E Fund Management Co. said mainland investors’ growing demand for global assets will be its main focus in Hong Kong in the new two years.

    “Many mainland banks and companies have a large amount of foreign exchange in Hong Kong that needs to be invested,” Ma Jun, an executive vice president at the fund firm, said yesterday.

    These investors are currently interested mainly in fixed-income products, Ma said, adding such products are expected to generate an annual return of around 5-6 percent in yuan terms.

    E Fund, founded in 2001, is one of the largest asset managers in the country with US$150 billion asset under management as of the end of 2015.

    Mainland investors have been seeking ways to move funds out of the country as the yuan falls to near six-year lows against the U.S. dollar, with further weakening expected, and as the world’s second-largest economy loses growth momentum.

    Expectations of more bond defaults have also made some investors nervous about local credit markets.

    Investment flows from Shanghai to Hong Kong under a stock market connection scheme have risen sharply in the past few months to reach 80 percent of the quota limit.

    “Mainland investors’ rising demand to invest globally is inevitable because they need to diversify risks as they grow bigger,” Ma said.

    Domestic asset managers have been accelerating their global expansion by setting up offices in Europe and the United States, as well as listing products there to make it easier for Western investors to enter China’s domestic market.

    E Fund (Hong Kong), the global platform for E Fund, has a subsidiary in New York. Ma said the firm also plans to set up an office in Europe. (SD-Agencies)